Burma Economy Can Grow 8.5 Percent This Year: IMF

Burma's economy should grow 8.5 percent during this fiscal year, higher than earlier forecast thanks mainly to rising gas production and investment, the IMF says.

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By Jared Ferrie 18 June 2014

RANGOON — Burma’s economy should grow 8.5 percent during the current fiscal year, higher than earlier forecast thanks mainly to rising gas production and investment, the International Monetary Fund said on Tuesday.

In January, the IMF predicted that Burma would have 7.7 percent growth during the fiscal year that ends March 2015.

The fund left unchanged its forecast that inflation during the fiscal year will be 6.5 percent.

Burma has launched sweeping economic and political reforms under its quasi-civilian government, which came to power in 2011 following nearly half a century of military rule. The government has taken moves to attract foreign investment, create jobs and boost the country’s weak infrastructure.

The IMF, which set up a monitoring program in Burma in 2013, said it would “intensify” its technical assistance and training. Team leader Matt Davies told Reuters the Central Bank of Burma had undergone “huge change” over the past two years, including gaining independence from the finance ministry and managing a floating exchange rate.

Davies welcomed Burma’s decision to allow a handful of foreign banks to begin limited operations after they receive licenses in September. However, he noted that their entry “will place further demands on macroeconomic policy and stretch supervision capacity”.

Davies said he expects there will be more foreign investment in manufacturing, telecommunications and natural resources.

Last year, Burma awarded telecommunications licenses to Qatar’s Ooredoo and Norway’s Telenor. Both companies are building networks throughout the country and are expected to launch service in the main cities within months.

In March, Burma awarded contracts to explore and operate offshore oil and gas blocks to companies including Royal Dutch Shell, Statoil, ConocoPhillips and Total. Burma exported $3.7 billion of gas in the fiscal year ended March 2013, up from $3.5 billion a year earlier. Most of the gas went to neighboring Thailand.